TNB buys stake in Turkey firm for RM1bil

PETALING JAYA: Tenaga Nasional Bhd (TNB) is buying 30% of GAMA Enerji AS for US$243mil (RM1.06bil), giving the company a stake in power generation assets in Turkey and a platform to pursue infrastructure projects in the surrounding region.

GAMA Enerji is building a 840MW gas-fired plant and a 45MW wind power plant in Turkey. It has also developed and operates a large water conveyance project in Jordan.

By 2017, GAMA Enerji is expected to have a gross installed capacity of 1,027MW in Turkey.

TNB said yesterday it had entered into a share sale agreement and shareholders’ agreement that would enable it to acquire the stake from GAMA Holding AS, International Finance Corp (IFC), and GIF Holding I Cooperatief U.A (GIF).

As part of the deal, TNB would also form a separate partnership with GAMA Holding to jointly offer operations and maintenance (O&M) facilities services regionally.

This would allow TNB to pursue untapped opportunities in the region’s O&M sector as well as leverage on GAMA Holding’s regional leadership in engineering, procurement and construction services.

“This investment is an important step in TNB’s strategy of expanding into international markets where power demand is rising. It is in line with TNB’s five-year international expansion roadmap to secure new overseas generation capacity,” TNB chairman Tan Sri Leo Moggie said in a statement.

The proposed acquisition would be financed by a combination of internal funds and external debt.

The investment remains subject to regulatory approvals from the Turkish Competition Board, Turkey’s Energy Market Regulatory Authority and relevant Malaysian regulatory authorities.

“The partnership will give TNB two seats on GAMA Enerji’s board with extensive control rights, as well as the opportunity to place key senior TNB professionals, particularly in finance, operations and maintenance, in GAMA Enerji’s management, bringing together TNB’s superior expertise and the strength of a large utilities company.

“It will also cement a strategic partnership with IFC and GIF, renowned institutions with many years of experience in developing infrastructure projects in Turkey and the Middle East and North Africa (MENA) region,” TNB said.

Turkey is one of the largest power markets in Europe and power consumption has shown an impressive 6% of average annual growth in the last decade.

“By gaining a presence in this key power market through our investment and long-term strategic partnership with GAMA Holding, TNB will be able to significantly grow its power generation assets in Turkey, as well as looking to expand further into MENA,” TNB president/chief executive officer Datuk Seri Azman Mohd said in a statement yesterday.

“We will do this by actively pursuing acquisition opportunities of existing power assets, as well as bidding for greenfield projects with GAMA Holding in Turkey and the surrounding region,” he added.

TNB’s equity investment in GAMA Enerji would result in a strategic partnership that would allow it to pursue regional expansion opportunities in terms of asset acquisitions, greenfield projects, portfolio optimisation and supply market entry.

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